Please don’t misconstrue this post as a defense of click fraud–hell, I hate it too. But as long as WE stay smart about the money we’re spending and the return we’re getting, then the sky isn’t falling.
If you completely eliminated click fraud at all the PPC engines, your PPC prices would skyrocket. Not that it would matter, because your cost of acquiring a customer through that engine would remain roughly the same.
A PPC engine is a market. The clicks that are being sold are given a value through an auction method. This value, over time, will take into account the number of fraudulent clicks. This is why the #1 result for “online casino” on Xuppa is only 17 cents per click, why it’s $1.54 on Goclick, why it’s $5.10 on 7search, and why it’s £7.99 (which is roughly equivalent to $14 or so USD)on Overture UK.
The cost of acquiring the customer is going to be roughly the same in each case. (There are always discrepancies in markets of any kind, that’s why we have arbitrage. Any affiliate doing a PPC campaign is doing arbitrage anyway–buying advertising for less than it’s worth and reselling it to their affiliate partner. If they’re profitable anyway.)
Here’s how the math might work, for example:
At Xuppa, it might take me 1000 clicks to get a single player. At 17 cents per click, I’ve paid $170 to acquire the player.
At Goclick though, it might only take me 110 clicks to get a single player. At $1.54 per click, that player cost me $169.40.
At 7search, I might be able to get a player from every 34 clicks. At $5.10 per click, that player cost me $173.40.
And at Overture UK, I might be able to get 1 player for every 12 clicks. At $14 a click, that’s $168.
The examples I made up are completely fabricated for illustrative purposes (except for the PPC cost for the keyword, which I looked up). And I’m sure there are greater discrepancies in player acquisition costs than in this example, because all markets are imperfect. If these markets were perfect, then we couldn’t make a profit on a PPC engine, because all the advertising being sold would be sold at a price exactly equal to the commissions we’d receive from the affiliate programs.
But my point is that even if there were 0 fraud, you’d still need to watch your player acquisition cost vs customer value extremely closely in order to make a profit.
And luckily we have a forum and a community for new webmasters so they can be warned about the PPC’s that are completely not profitable at all. (Because frankly Xuppa never sent me a single player after over 2000 clicks when I tested them.)